BUZZ-U.S. financials slump after Fed holds fire on rates

Fri Sep 18, 2015 11:21am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

(Updates prices, adds details on banks)

** Major U.S. financial stocks dragged on Friday, reacting to U.S. Fed keeping interest rates unchanged

** A rate hike delay could dent profits at banks, which get a boost in a rising rate environment, as they can charge more for loans while taking a longer time to lift the rate they pay to depositors

** Thomson Reuters data shows Q3 expected earnings growth for financials at 12.1 pct, down from the expected 14.8 pct at the start of the quarter and 17.8 pct at the start of the year

** And banks will likely seek greater operating efficiencies in near to intermediate term, says Fitch ratings

** The diversified bank sector was the biggest drag on the S&P 500 on Friday, accounting for more than 12 points of the 17.9-point decline in the benchmark index

** Citigroup Inc lost 2.4 pct, Goldman Sachs Group Inc shed 2.5 pct, JPMorgan Chase & Co fell 2.3 pct, Morgan Stanley declined 2.4 pct, Bank of America Corp dipped 1.9 pct, Wells Fargo & Co eased 2.4 pct

** Fed kept rates unchanged on Thursday, bowing to concerns about global economy, market volatility and sluggish domestic inflation

** KBW Bank Index declined 2.1 pct on Thursday, Dow Jones Titans Financial Services Index fell 1.1 pct and the S&P 500 banks index dropped 2 pct

** Insurers American International Group Inc and MetLife Inc also down, as are other financial stocks including Visa Inc, MasterCard Inc, American Express Co and Prudential Financial Inc (Reporting by Richa Naidu and Chuck Mikolajczak)